Retail sales in the U.S. fell for the second consecutive month during February, according to a new preliminary Commerce Department report, raising some concerns about overall economic growth this year.

The 0.1% decline from the month before comes as the department revised January’s initially reported increase of 0.2% to a 0.4% falloff.

Excluding volatile auto and gasoline sales, however, February retail sales rose 0.3%, a solid performance.

Overall a 4.4% drop in gasoline, a 0.2% decline in autos and a 0.5% drop in furniture sales negatively affected sales. Clothing sales increased 0.9%, and building materials and garden store sales posted a 1.6% increase.

Despite this most recent downturn, February’s level is 3.1% higher than the same time in 2015, and sales for the December 2015 through February 2016 period were up 2.9% from a year earlier.

The reason retail sales matter is the sector drives about 70% of the U.S. economy.

Though the continued decline in nominal retail sales so far this year is disappointing, it is in large part the result of falling gasoline prices, sending gas station receipts markedly lower in both February and January, according to Paul Ferley, assistant chief economist at RBC Economics.

“Control retail sales, which eliminates the impact of various volatile components including gas station sales, though unchanged in February, had increased in three of the prior four months,” he said. “These earlier gains bode well for real first quarter consumer spending rising an annualized 3%, which would be up from the 2% gain recorded in the fourth quarter.”

While a 3% annual increase retail spending is much improved from a sub-2% annual pace early on last year, it also remains a far cry from a circa 5% pace less than 18 months ago, said Stifel Fixed Income Chief Economist Lindsey Piegza.

“Going forward, as a consumer-based economy, without a meaningful pickup in spending, the U.S. economy will be hard pressed to maintain a stagnant 2% pace, let alone gain additional traction from here,” she said.

Wholesale Core Prices Post Modest Increase

Meantime, a U.S. Labor Department report issued Tuesday shows prices at the wholesale level fell slightly in February, but there are signs of inflation over the past year in a closely watched indicator.

The February Producer Price Index (PPI) dropped an expected 0.2% following a 0.1% increase in January.

The decline was led by a greater weakness in wholesale gasoline prices, which dropped 15.1% after an 8.8% decline in January. Food prices also moved lower, dropping 0.3% following a 1% increase in January. Trade services also reversed some January strength dropping 0.4% in February after the previous month’s 0.9% surge.

On a year-over-year basis, the overall PPI was unchanged in February compared to 0.2% drop in January. It's the first time since January 2015 there has not been a year-over-year decline.

However, the closely watched core prices, which exclude food and energy, rose to 1.2% in February from a year earlier, up from the January rate of 0.6% compared to the same time in 2015.

This firming in core prices could help push the Federal Reserve to move interest rates higher, following its first hike in many years last December.

Indications of solid, and strengthening, domestic spending are expected to result in the Fed resuming the tightening in monetary policy initiated in December with the Federal Funds range rising 25 basis points to 0.25% to 0.50%,” said RBC’s Ferley. “A similar-sized hike is expected in each of the remaining quarters the year with Fed Funds finishing 2016 at 1% to 1.25%.”